Unpaid invoices are common in any field of work. No matter which industry you are in, there will be times where you will have to face delinquent accounts. For example, a customer may refuse to pay their bills due to financial reasons.
When debts are not collected, your business becomes affected. You may suffer from losses, and your credit risk management ability is reduced. In such cases, it is best to hire a debt collection firm.
A debt collection firm such as Darrell W. Cook & Associates collects the unpaid invoices on behalf of your company. They may use a collections lawyer or other ways to get you what you are owed. Nowadays, many firms can help you with debt collection.
However, not all firms handle the debt collection process well. There are many factors you should consider when hiring an agency. Here are the top things you should look for when selecting a debt collection firm:
- Total Return On Investment (ROI)
One of the things you should keep in mind when selecting any debt collection firm is that you will never get the original figure you are owed. This is because the collections lawyer will charge some fee for their services.
When comparing different firms, you might just look at their initial prices. However, the primary thing you should consider is the return on investment (ROI).
Some debt collection firms charge a low fee for their services. As a result, their recovery rate is also low. Thus, the best agency is not the one with a lower cost but one that offers you a higher ROI.
- License
The laws in different states of the US regarding debt collection vary significantly. Many places require the agency to have a legal license. Otherwise, their processes would be deemed illegal, and this may affect your business’s reputation.
When looking for a collections lawyer or firm, it is best to check if they are licensed. You should ask the agency if they are a member of the Association of Credit and Collections Professionals (ACA).
Firms and collections lawyers who are a part of ACA are well-known for being licensed. You can also be at ease that they are law-abiding. This is because all debt collection firms working with ACA have to follow a certain standard of conduct.
- Insurance
The FDCPA is an act in place to ensure that debtors are treated fairly by debt collection firms. It also allows the individuals to sue the agency by filing a claim of unfair treatment. In such a case, your business may be held liable for hiring the firm.
However, if the debt collection firm has Errors and Omissions insurance, you don’t need to worry about liability. That is why you should ask the agency you are considering to show you the insurance certificate. If they don’t have one, then we suggest you hire a different firm.
- Specialization
There are many debt collection agencies that you will find in your vicinity. However, some firms specialize in a particular industry only. That is why it is best to look for a collections lawyer who is best suited for your company.
Some debts also require particular collection tactics. Thus, you should research the firm well. For example, ask them questions about their specialty. Besides that, you should also tell them to give examples of past debt collections they did for another company.
- Collections Process
This is an integral factor that you should look into thoroughly. In the past, it was a common practice for debt collectors to use violence to get the payments. However, now there are laws that prohibit this manner of collection.
Whichever firm you are considering must have a clean process. This means that they should only use legal methods for collection. Otherwise, you will be putting your company’s reputation at risk.
Final Words
That was all you needed to know about what to look for in selecting a debt collection firm. If you are looking for a Texas collections lawyer, we have the best suggestion for you.
Darrell W. Cook & Associates is a law-abiding, insured, and licensed debt collection firm. They have a high recovery rate and use only legal methods to get you what you are owed. That is why you should consider them if you live in Texas.
